UPDATE: Canaccord Slashes Price Target For Herbalife Ltd; Remains Positive On The Stock
In a report released after market close today, Canaccord Genuity analyst Scott Van Winkle maintained a Buy rating on Herbalife Ltd. (NYSE:HLF) and reduced the price target to $42 (from $50), which implies an upside of 38%.
Van Winkle explained, “The fundamentals are feeling the weight of changes to the marketing plan at a time when currency is adding insult to injury. While it is starting to feel like a value trap, we still believe that the valuation overly discounts the business and its cash flow and maintain our BUY rating.”
Furthermore, “We continue to believe that the shares are significantly undervalued assuming any reasonable resolution to regulatory scrutiny. Our BUY rating is based on the expectation of a resolution removing uncertainty without a debilitating impact on the business model that leads to a meaningful revaluation. Our valuation not only discounts the regulatory scrutiny, but also the lower growth outlook. Our $42 price target reflects 10x our new F2015 EPS estimate.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Scott Van Winkle has a total average return of 15.2% and a 62.9% success rate. Winkle has a -3.0% average return when recommending HLF, and is ranked #165 out of 3492 analysts.